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Bankruptcy and Family Law Attorney in Coeur d'Alene
ALC is a Coeur d'Alene Based Law Firm, Handling Probate, Family Law, Bankruptcy, Personal Injury and Civil Litigation Matters

Rumors About Bankruptcy


Bankruptcy and Family Law Attorney in Coeur d’Alene

Serving Coeur d’Alene & Kootenai County Areas, including Coeur d’Alene • Hayden

The Rumor:

You can no longer file for bankruptcy.

The Truth:

Relief from debt via bankruptcy is still available. Though the 2005 amendments have made the process more complex, it is still available.

The Rumor:

Everything you own will be seized in a bankruptcy.

The Truth:

The vast majority of bankruptcy cases are what are known as “no asset” cases in which everything the filer owns is exempt from liquidation. Some assets, like pensions, are excluded from being part of the bankruptcy estate.

The Rumor:

If you’re married, you both must file for bankruptcy.

The Truth:

You can file together, but you don’t have to.

The Rumor:

If you are employed, you can’t file for bankruptcy.

The Truth:

Though the means test instituted by the 2005 bankruptcy code amendments may exclude some filers with a steady income from filing for Chapter 7, those persons are still eligible for a Chapter 13 filing… in fact, having a job is a requirement to file Chapter 13.

The Rumor:

If you file for bankruptcy, you won’t be able to get credit for 10 years.

The Truth:

Though the fact that you have filed for bankruptcy will stay on your credit report for 10 years, those who have received a discharge in Chapter 7 are regularly bombarded with credit card offers, even though these offers are for low-limit, high-interest cards. People who’ve filed Chapter 13 often get credit while their plan is being enacted.

The Rumor:

You can’t get rid of medical bills in bankruptcy.

The Truth:

This rumor was probably started by collection agencies, but medical bills are unsecured debt, and you are assured of getting them discharged in bankruptcy.

The Rumor:

You have to completely pay off all your debts in Chapter 13.

The Truth:

The variations of Chapter 13 plans are as varied and unique as the people who file them. Some plans ensure that every debt is completely paid off, but there are just as many – if not more – plans that focus only on “priority” debt like support orders and taxes while unsecured loans are paid pennies on the dollar. It really depends on your financial situation.

The Rumor:

You have to have certain amount of debt to get a bankruptcy.

The Truth:

There are no set minimums required for bankruptcy filing or discharge of debt. If you cannot pay what you owe, and it is in your best interest financially, logically, and emotionally to file, you should pursue bankruptcy.

The Rumor:

If you file for bankruptcy, you’ll be considered a failure.

The Truth:

Most people – whether they’re considering bankruptcy or not – have a desire to pay back what they owe. But, sometimes, situations like illnesses, job loss, or other factors prevent people from being able to live and pay off overwhelming debt. There’s no stigma attached to bankruptcy, if it is the best decision for your family, health, and finances. We at Advocacy Law Center, PLLC are here to help! Contact one of our bankruptcy or family law attorneys today.